The Nigerian Senate, through its Committee on Finance, has urged the Federal Government to revert to the former contractor payment system, citing that the current centralised approach has left it owing numerous contractors, including those who executed projects in 2024, let alone those slated for 2025.
The Committee also sought the replacement of the Envelope budgeting system with priority or performance-based model, just as it called for the sack of the Registrar General of the Corporate Affairs Commission (CAC), Hussaini Ishaq Magaji, for persistent refusal to appear before the committee.
Resolutions to these effects were taken by the Committee during an interactive session he had with the economic management team of the Federal Government, led by the Minister of Finance and Coordinating Minister of Economy, Mr Wale Edun.
The session also had in attendance the Minister of Budget and National Planning, Senator Atiku Bagudu, the Accountant General of the Federation, Shamseldeen Babatunde Ogunjimi and the Chairman, Nigeria Revenue Service ( NRC ), Zacch Adedeji.
Putting the economic team on their toes in his opening remarks, the Chairman of the Committee, Senator Sani Musa (Niger East), told them that realities on ground, based on feedback gotten from submissions made by heads of the various MDAs during budget defence sessions, show that the impact of the economy is not felt by ordinary Nigerians.
According to him, the economic team needs to collaborate with the National Assembly for a way out, which they believe requires replacement of current operational systems.
“Specifically, based on submissions made by heads of various agencies during the ongoing budget defence sessions, the Envelope system of budgeting has failed and needs to be replaced by priority-based models.
“The incremental allocation model has outlived its usefulness. It promotes routine expenditure expansion rather than strategic prioritisation.
“Similarly, the centralised system of payment, which has led to many contractors remaining unpaid for projects already executed , should be replaced with the old system, which allows the various MDAs to pay contractors they gave jobs to” , he said.
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He further emphasised the need to restore strict adherence to the annual budget cycle, insisting that budgets must be time-bound and measurable.
“If, by December, we cannot assess ourselves realistically, then the system is failing. We must return to a disciplined budget cycle where one fiscal year ends before another begins”, he said.
In their separate remarks, all the members of the committee toed the line of the Chairman by admonishing the economic team to sit up for better budget planning and implementation, as well as prompt payments to contractors.
In their responses, the economic team assured the committee, and by extension, Nigerians, that the outlook for 2026 is very positive for the N58.472trillion proposed budget in terms of implementation.
Mr Edu explained to the committee that the N152trillion budget profile the country currently has was not accumulated by borrowings alone.
“Currently, government debt in Naira terms is 152 trillion Naira. About 30 trillion Naira came from Ways and Means inherited by this government, and N9 trillion incurred from exchange rate adjustment.”
“So virtually half of that debt is made up of adjustments. It is not additional borrowing. Additional borrowing since 2023 is in the 20 trillion range.”
“Going forward is what matters most. Prioritisation will start with the MDAs, bringing forward growth-enhancing projects. Then the Economic Management Team will review those projects, and finally, Mr. President will decide financing based on priorities, particularly for capital projects.”
Earlier at the commencement of the critical engagement session with the economic team, the committee resolved to write President Bola Tinubu to sack the Registrar – General of CAC, for his persistent refusal to appear before them.
Committee Chairman Sani Musa accused Magaji of disregarding the summons and instead sent junior officers to represent him during budget defence sessions.
“He (Magaji) refused on so many occasions to honour our invitation to appear before this committee. “We have issues with the reconciliation of the revenue of CAC. “Each time we invite him, he gives us excuses,” Senator Musa said.
Allegations of financial discrepancies also prompted the Senate’s strong call against the CAC leadership, and particularly Magaji.
The Senate says it is concerned about unresolved issues regarding the CAC’s revenue reconciliation and has threatened to withhold the 2026 budget approval for the commission.
Magaji was appointed to this position by President Tinubu on October 13, 2023.
As the Registrar-General of the CAC, Magaji is expected to work for the development and regulation of corporate affairs in Nigeria.